ITV is garnering praise for its domestic programming as it battles a tough TV market, while the BBC takes a more internationalist approach.ITV deserves the highest of praise for what may become a spate of dramas exposing contemporary scandals and tragedies.It is a tradition more associated with the BBC all the way back to Cathy Come Home, broadcast in the year when the England football team won the World Cup. ITV’s Granada did, however, make important contributions to docudramas with films such as Hillsborough.But fresh from the plaudits of Mr Bates vs The Post Office, ITV has produced a worthy successor in Breathtaking, a drama mercilessly exposing the chaos, fear and bungling at the upper reaches of politics and medicine in the early days of the Covid-19 pandemic. Both are likely to have more immediate impact than the public inquiries still stuck in their tasks.For ITV, such programmes have the added advantage of reaching sections of the audience who are not the greatest fans of Love Island.If programmes of the highest social merit and political significance were to translate into share price value, ITV would be riding high at the moment.Alas, it’s straight As for the programme-makers, while a B-plus might be a more appropriate rating for ITV the corporate entity.On Thursday, ITV is likely to reveal dismal annual results, with analysts predicting pre-tax profits of £363m for 2023 — a fall of 46% from last year’s £672m. The fall is almost entirely due to an 8% drop in advertising revenue, resulting from what was described by ITV chief executive Dame Carolyn McCall as “the worst advertising recession” since the global financial crisis.McCall believes this is a temporary blip, with ad budgets — marked by large cuts by major advertisers such as Amazon and Tesco last year — likely to rebound in 2024.Ad budgets wax and wane with the economic tides and ITV’s long-term strategy has been to reduce its dependence on the UK ad market while following the global media trends towards subscription revenue and streaming.How well is the strategy going?McCall will set out the scale of the contribution that streaming service ITVX, launched in December 2022, is making. But she has already claimed that last year was the peak year for spending on the platform and that increasingly the service will help to compensate for audiences lost by traditional ITV broadcast channels.Into this strategy came an unexpected element of disruption: the sale of ITV’s 50% stake in BritBox International to BBC Studios for £255m.The sale was well-received by the markets and, combined with the intention to use the money for a share buyback, the announcement helped to push ITV’s share price up by more than 15%. However, since then, about half the gains made have already evaporated.Conventional wisdom, certainly among the consulting classes, would be that getting rid of an inconvenient stake and simplifying strategy is a good thing.Indeed, McCall has been keen to argue that in the future ITV will, apart from its traditional television business, concentrate on the development of ITVX as a digital-first service and programme-maker ITV Studios.Despite the sale, ITV Studios will still benefit from programme supply agreements with BritBox International. So it is perfectly reasonable to justify the sale as part of a perfectly reasonable ITV strategy.There are a number of caveats.The deal certainly marks the end of a brief era when formal collaboration between the UK’s public service broadcasters was seen by many, including regulator Ofcom, as the best way of competing against major US streamers.Maybe such collaboration was always a vain hope, but active collaboration seemed like the least bad strategy.Now the BBC is on its own in a very unequal battle to be a “Best of British” channel. At the same time, ITV has never really done abroad very well. This was partly the result of a fragmented structure over 15 regional companies — the reality for most of its life.But the withdrawal from BritBox International seems like a retreat from global markets. A bit like a Brexit-for-broadcasting sort of decision.And ITV could have further retreating to do.Launching ITVX was a sensible, and necessary, thing to do but there was always the danger that BritBox in the UK (of which BBC Studios sold its residual 10% stake in 2022) would ultimately become an orphan.Under the reductionist theory of management, BritBox UK could be judged to be unnecessary corporate clutter and will end up being completely absorbed in the ITVX brand. That could be the next step once the dust has settled a little. The standalone BritBox app is already being discontinued in April.So we end up with a couple of broadcasting paradoxes.ITV has edged aside a cash-strapped BBC in the production of high-profile, controversial dramas that address urgent crises.Meanwhile, it is somehow the BBC — through BBC Studios — that is behaving in a more entrepreneurial and certainly more internationalist way. All the BBC has to do now is to make a huge success of BritBox International, which may before too long be able to simply call itself BritBox.
- The views on this post is of Raymond Snoddy who is a media consultant.
© 2024 Mediatel Limited.